Uber,one of the world’s leading internet-based ride-sharing services recently announced that it will be introducing a cash payments alternative for its South African service before the end of this month.
According to a report from Fin24, this is actually a just pilot project for the country which is expected to be carried out with half of Uber drivers in South Africa and it will be launched simultaneously across 5 cities.
Uber is probably trying to determine how much of a barrier credit card payments have been in the uptake of the service in the country.
Though South Africa will become the first country to have that many cities offering the option to pay for a ride using cash, it comes after the alternative has been tried in at least 7 other markets that include India, Singapore, Nigeria, Kenya, and Egypt.
Ordinarily Uber payments are made via credit card so the alternative for cash payments has generated a lot of interest around the need for service iteration to suit market conditions.
In Kenya, for example, Uber not only opened up to cash alternatives but it also enabled payments via M-Pesa – the mobile money service that has defined electronic payments for the East African country.
For markets where plastic money does not command a tremendous following, Uber is certainly on the mark by bringing the cash alternative to the table.
Interestingly some of the African countries where Uber launched like South Africa, Egypt, and Nigeria are actually some of the lead adopters of credit card use.
So for a service provider as visible as Uber to look beyond plastic money seems to indicate that for online solutions in Africa an offline payment alternative has to be thrown in there at some point to gain traction.
While the full extent of such a need might vary from country to country, the recent events in Zimbabwe show that it is a major consideration for local startups.
The country has experienced severe liquidity challenges which the Central Bank has failed to resolve by encouraging a massive adoption of electronic payment alternatives like mobile money.
People still want to pay in cash, so Uber or any other taxi service or internet solution might want to keep that in mind.
image credit – southernafricantravel.com
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3 comments
in south africa this is solving a non existing problem, the reason why mpesa has perenually failed in south africa is because the country is highly banked, 90% of people have bank account so they have either a credi card or debit carf. just make all debit cards work and its all good. what people are asking for is the ability to tip drivers in app without carrying cash, the feature used to be there
I concur the problem here is not taking cash payments or not. In fact for me its actually inconvenient for me to carry cash around in SA. What we need is a solution to the fact that UBER is only accepting certain debit cards at the moment. Bidvest and FNB seem to be winners. ABSA however does not work and the rest are either not sure or do not work.
Beyond this if I “swipe” my card its free. ATM withdrawal is not free.
Cost of transactions using plastic money is high in Africa and especially in Zim. In first world countries you can basically swipe without any bank charges. If banks addressed that issue majority of people can adopt plastic money